Free Rise

When I first went to work for Wells Fargo, one of the things that was hard to get used to was what they called their branches: “stores.” In hindsight, it made a lot of sense. Retail banks are called as such for a reason, after all. Most people think of branches as places to transact, but they’re very much retail environments, where brands are established (and refreshed), customers are profiled, and products are sold.

Around the turn of the millennium, the branch looked doom. Online banks with no physical locations were growing fast, and the traditional banks were building out their online capabilities.

Then traditional banks changed tack and doubled-down on meatspace. Major players built thousands of new branches to attract deposits, and some even radically redefined branches entirely. Umpqua’s wi-fi lounges (pictured above) and WaMu’s Occasio were particularly innovative. (Sadly, WaMu’s new Chase overlords are doing away with Occasio.) Commerce Bank grew super-fast with the simple innovation of extending their hours to times that were more convenient for working people.

But now Bank of America is retrenching, shuttering 10% of its branches. Does this mean the end of the store strategy?

Yes and no.

Yes: Retail (consumer and small business) customers are becoming ever more comfortable with online services. As they spend more time interacting with banks online, banks are finding more ways to market and sell through online channels.

No: America is over-retailed in general, and banks are no exception. BofA probably had too many branches to begin with. Other big banks that built out (or acquired) branch networks during the housing boom are probably now looking at their cost structure and finding many unprofitable locations. Shuttering may occur, but people will still want a physical location to transact checks, cash, and the other tangible forms of money that still power our everyday economy.

We can only hope that more of these banks will follow the Umpqua and Commerce models and create a branch experience that its customers don’t hate. Whoever does that will win deposits, and today, that matters more than anything.

Social media is no longer buzzing like a honeybee or a power line. Rather, Social media is roaring, like a chainsaw.

Social media is not just the newest new form of direct marketing. It’s rapidly becoming the primary way that people –- your customers –- seek recommendations and chat with each other about their purchases.
In this environment, every forward-thinking business is already trying to figure out its social media strategy. But the social media ecosystem is so fluid that trial-and-error will only reveal temporary solutions.  And trial-and-error is, by itself, not really a strategy.

So what questions should businesses, especially small, local ones, be asking themselves about social media?

1. Do I need a social media strategy? The answer to this question is a universal “yes,” even if your strategy ends up being “do nothing.” But it’s hard to imagine a small business that couldn’t be served by the fastest emerging method of person-to-person communication on earth.

2. What type of interaction would best serve my current business goals? Social media is about multi-party communication. It connects a business with its customers, but more importantly it can connect a business’s customers with each other. To form an effective social media strategy, a business needs to figure out who needs to be interacting with whom, and how that interaction should be taking place.
Some examples:

• A restaurant that seeks to increase patronage from its regular customers would want a platform to promote its daily specials and perhaps promotions (“free wine Wednesdays”).
• An emergency plumber which gets its main business from immediate problems would want a platform where its current and prospective customers could quickly reach them.
• An auto repair shop which faces lots of competition and customer skepticism would want a platform where past customers could attest to the shop’s honesty and reliability.
• A web-based business would want a platform that could drive traffic to its site and encourage its customers to promote the business to others.

3. Which platforms would best serve those communication needs? Obviously, “Get me on Twitter and Facebook” is not a social media strategy. But once you’ve decided who you’re targeting and what you want to accomplish, you need to pick your platforms: Facebook, MySpace, Twitter, YouTube, Yelp, Ning, Yola, and other sites each serve some purposes better than others.

4. How should I craft my presence on those platforms? The WSJ reported recently on a Twitter campaign by web site builder Moonfruit which increased its homepage traffic 13-fold and paying customers by 20%. The cost? Ten MacBook Pros. Since the contest ended, MoonFruit has lost more than 1/4 of their new followers, but now they’ve built a list of 34,000 followers to engage. It’s never been so easy to build a list that large, but now MoonFruit has the challenge of maintaining these subscribers’ interest, or they’ll tune out. Which leads to…

5. How much time can I commit to maintain my social presence? Unlike building a website, creating a blog, social network page, or Twitter feed takes ongoing effort. To keep your business from being sucked into the social media black hole, you have to maintain the presence with new interaction (or “feed the beast”). Each social platform requires a minimum frequency of interaction to be effective. Figure out who will own your business’s interactions, and how they’ll commit to keeping the brand alive online.

This last point is crucial. Creating and abandoning a social media platform is like letting dust collect on your store shelves.  Thus, if you’re not serious about interacting with your customers online, you should find another method of marketing your business. And good luck finding one that’s more effective.

I had turned off comments for spam reasons. I’ve installed Akismet on this blog now and reopened the comments. Have away.

Is Twitter really for old people? Do most kids really prefer watching pirated DVDs to going to movies, and do they really mostly talk to their friends over their XBox 360s?

My friends who happen to be marketing types have been asking themselves these questions this week, as the Internet went all a-titter about the recent thoughts of Matthew Robson, a 15-year-old boy with a summer internship at Morgan Stanley in London. The venerable investment house for some reason decided to publish Robson’s anecdotal report How Teenagers Consume Media as “research.” (How many of us have relied on the summer intern to tell us what the kids are up to?)

OMG! Everyone is on Facebook, nobody listens to the radio, Twitter is pointless, and banner ads are teh sux. Quick, everyone revise your youth marketing plans!

Oh wait. What about the 99.9% of British teens who aren’t friends with Matthew Robson? (And what about the 65% of Twitter users under 25?)

In this context, it’s worth reading (or revisiting) danah boyd’s remarkable “The Not-So-Hidden Politics of Class Online,” a talk she delivered to the Personal Democracy Forum in New York.

In this talk, Boyd (sorry, the lower-case name drives me bonkers) asserted that Facebook and MySpace drew similar size audiences in America. But when she polled her “primarily American, primarily liberal-leaning, primarily white, and primarily involved professionally in politics” audience, she found that almost all of them used Facebook, but almost none of them used MySpace.

It’s more than obvious that online social networks, like all networks, are class stratified and homophilic. As Facebook opened up beyond college kids, many MySpace users chose to jump ship. But just as many stayed put. So, who bailed? Boyd’s research of young people led to a complicated conclusion:

It wasn’t just anyone who left MySpace to go to Facebook. In fact, if we want to get to the crux of what unfolded, we might as well face an uncomfortable reality… What happened was modern day “white flight.” Whites were more likely to leave or choose Facebook. The educated were more likely to leave or choose Facebook. Those from wealthier backgrounds were more likely to leave or choose Facebook. Those from the suburbs were more likely to leave or choose Facebook. Those who deserted MySpace did so by “choice” but their decision to do so was wrapped up in their connections to others, in their belief that a more peaceful, quiet, less-public space would be more idyllic.

Even within Facebook, the social divisions remain extreme. If Morgan Stanley were to ask me what Facebook users were like, I’d tell them they’re iPhone-using, gourmet-cooking, Democratic-voting, Daily Show-watching, mid-career professionals. What I’d really be reporting are the psychographic profiles of Jewish kids who grew up in Miami in the ‘80s, mid-‘90s Wesleyan alums, and Bay Area MBAs. (My wife, who has lots of friends from her tiny southern hometown, gets a somewhat different picture.) Your experience probably varies. Same deal with Twitter – I’m following 200-odd feeds, and none are of the “My cat is sleeping on my lap” variety. Your experience again probably varies.

The California tech community, which chatters at itself continuously via Facebook, blogs, and Twitter, has an understandably warped view of the pervasiveness of certain tech brands, and the use of technology in general. In our little world, Apple, Twitter, Facebook, Google/GMail/YouTube, Skype, and Firefox dominate. Meanwhile, the hundreds of millions of global citizens on MySpace, Yahoo!, AOL, MSN/Hotmail, and Windows PCs are ignored or disparaged, to say nothing of all those still listening to the radio or reading dead-tree periodicals.

It’s easy to get wrapped up in a world where “teenagers do X,” but some of us still remember high school. If Morgan Stanley came calling, I probably couldn’t find a damn thing that even a solid plurality of my classmates were into. My crowd liked the Dolphins, Led Zeppelin, getting good grades, hating George H.W. Bush, and being scared of girls. They were generally affluent enough to have cable TV, but not enough to have new cars. That’s how my report on the American teen would have read.

Fast forward 20 years. Twitter isn’t for everyone. Nor is anything else. Teenagers’ technology habits will evolve as technology itself does, but also as those teenagers go off to college, or the workforce, or the Army, or all the other places they can go. As marketers and citizens, we should never mistake one boy’s friends or our own experiences for those of the world. Or as Boyd puts it:

If you are trying to connect with the public, where you go online matters. If you choose to make Facebook your platform for civic activity, you are implicitly suggesting that a specific class of people is more worth your time and attention than others. Of course, splitting your attention can also be costly and doesn’t necessarily mean that you’ll be reaching everyone anyhow. You’re damned if you do and damned if you don’t. The key to developing a social media strategy is to understand who you’re reaching and who you’re not and make certain that your perspective is accounting for said choices. Understand your biases and work to counter them.

That last line is great advice for life, too.